April 30, 2019
Turkey is seeking ways to buy more oil from Iraq, already a major supplier of crude to the Middle East’s biggest economy, as the U.S. looks to squeeze exports from Iran, according to two people familiar with the matter.
Turkey could consider oil imports from Iraq’s southern port of Basra and may also try to secure more shipments via an existing twin pipeline that runs to the Turkish Mediterranean terminal of Ceyhan, despite its state of disrepair, the people said, speaking on condition of anonymity because they aren’t authorized to speak to the media.
The Trump administration is ending waivers that allowed a handful of countries including Turkey to continue importing oil from sanctioned Iran a year after the U.S. withdrew from the 2015 nuclear deal. Turkey has long opposed the U.S. curbs on Iran, with President Recep Tayyip Erdogan saying last year that “such sanctions are aimed at tipping the balance in the world” and violate international law and diplomacy.
A spokesman for Turkish refiner Tupras Turkiye Petrol Rafinerileri AS wasn’t immediately available to comment. Last week, the company declined to say how it would offset any potential cut in Iranian supplies.
After a meeting Sunday with Basra’s governor, Asaad Abdulameer Al Eidani, Cavusoglu said on Twitter that Turkey “will establish a trade corridor” to Iraq’s biggest oil hub.
Turkey said last week that it’s also working on a mechanism with Tehran to avert U.S. sanctions designed to halt trade with Iran. Although Turkey has long defended the trade with its eastern neighbor as a strategic necessity, taking on the U.S. can be risky as the government in Ankara struggles to secure the release of a senior banking executive convicted in New York of helping Iran evade American financial curbs.
The blowback from American sanctions against Iran could also hit Turkey’s economy, which entered its first recession in a decade last year as oil prices surged. The prospect of higher prices or the risk of a confrontation with the U.S. don’t bode well for Turkey’s currency, already battered by weeks of upheaval.